Government is to borrow 15 million euros (Shs 45bn) from Germany's KFW for a 132kw transition line connecting Kampala and Entebbe.
The line, to be implemented by the Uganda Electricity Transmission Company Ltd (UETCL), is expected to be completed by 2015. Signing on behalf of government, Fred Omach, the state minister for Finance (General duties), said the loan would go a long way in increasing power capacity in Entebbe. It will also reduce the power cuts that are being experienced at the moment.
"Entebbe is growing, with businesses there increasing every day. This project couldn't have come in handy," Omach said.
Udo Webber, the head of development cooperation at the German embassy, said their government was already supporting the project with six million euros (Shs 18bn), which brings the total cost of the project to 21 million euros (Shs 63bn).
The project will entail the construction of a 35km transmission line of 132KV. There will be the extension of the Mutundwe substation in Kampala as well as the construction of a new substation.
UETCL Managing Director, Eriasi Kiyemba, said all the feasibility studies had been complemented. The project is slated to start early next year. The loan's span is 15 years, with a grace period of two years.
Germany has supported a couple of energy projects in the country, including the Nyagak power dam, which was commissioned last year.